Perhaps the greatest effect of yesterday’s announced Federal Trade Commission (FTC) settlement with Express Scripts is its mandate on consumer exposure to net prices at the pharmacy counter as opposed to the inflated list prices of insulin products. But the implications go far beyond insulin. The settlement may contribute to the demise of high wholesale acquisition cost (WAC) pricing.
The FTC stated that Express Scripts would, as part of the agreement, now list preferred drugs under their low-WAC, not high-WAC, prices on standard formularies. In addition, Express Scripts will interface with the federal government’s TrumpRx site to allow the PBM’s members access to direct-to-consumer pricing platforms within its standard pharmacy benefit design.
Affecting Insulin and Beyond
All Big 3 PBMs were sued by the FTC over alleged insulin price fixing. To date, only Express Scripts has reached an agreement with the FTC. The settlement reached by the FTC may cause much consternation and uncertainty with big 3 leadership and investors, but it is unquestionably a step in the right direction.
When patients’ out-of-pocket costs are based on net pricing (that is, after rebates and discounts), their costs at the point of dispensing may decrease. This will not be the case for patients who are members of plans using fixed copayments for insulin and other products. But as Drug Channel Institute’s Adam Fein says, “The settlement helps shield patients from excesses of the gross-to-net bubble.”
“This settlement enables us to keep moving forward, and we appreciate the administration’s reinforcement of our commitment to pharmacy benefits that put Americans first,” Express Scripts said in the statement. “This is a meaningful step toward affordability for millions of families, and toward advancing the goal we share with the Administration of full transparency into prescription drug costs.”
Insulin is just the catalyst in this chain reaction. According to the latest Samsung Bioepis Biosimilar Market Report, the low WAC price of insulin glargine hovers around $18 for a single prefilled pen. On a per-patient basis, insulin is one of the least expensive biologics (at least facing biosimilar competition). Many more, higher-cost agents covered under the pharmacy benefit should follow suit.
The FTC has been called on for years to take a greater role in countering anticompetitive marketplace activities around biosimilars, including the use of patent thickets to block biosimilar competition and the use of misleading marketing information.
